Fourth District, Division 3 Finds Defendant Did Prevail and Award of Fees Eclipsing Damage Exposure By Three Was Not Out of Line.
Imagine this one.
Plaintiff sues defendant for $47,000 when defendant failed to purchase software and maintenance from plaintiff. Defendant brought a cross-claim for fraud, which it conceded was essentially defensive in nature (although praying for much larger damages). The jury found against plaintiff and for defendant/cross-complainant. Defendant sought to recover $141,000 in fees under broadly worded contract clauses. The trial court awarded them, and defendant appealed claiming they were not authorized and were excessive to boot.
Result on appeal? Affirmed, says the Fourth District, Division 3 in an unpublished decision, Epicor Software Corp. v. The Imagery Group, Inc., Case No. G039104 (4th Dist., Div. 3 May 22, 2008).
Acting Presiding Justice O’Leary, writing for the 3-0 panel, initially found that there was a broadly worded fee clause in integrated software licenses, purchase orders and related documents. Tough to segregate the documents given that they were all interrelated, which meant plaintiff’s “no contract basis for the award” argument was doomed.
Perhaps the best message from this Opinion is what we see, time and time again. If there is a clear victor, and if the litigation was heavily contested, and if there is no basis to apportion fees among disparate claims, the victor will win, even if the fees far exceed the potential exposure to the winning party from the complaint.
That was exactly what occurred here. The appellate court even cited to Thompson Pacific Construction, Inc. v. City of Sunnyvale, 155 Cal.App.4th 525, 557 (2007) (see Thompson post), where the court affirmed an award of $377,799 in attorney’s fees incurred to defend a $58,994 claim. With even more appellate élan, Justice O’Leary was not persuaded by defendant’s final plea that “no prudent business man would spend $141,000 in fees to defend a $47,000 claim unless [he] had much bigger objectives”—finding that this frequently happens, happened here, and meant the victor gets the fruit of an unqualified victory even when the stakes appeared much more minimal in nature. (Slip Opn., at p. 11.)